A Proposed Costing System for Agile Just-In-Time Supply Chains with Back-Flush and throughput Accounting

Mohamed M. El-Gibaly *

Brunel University, London, England and Beni Suef University, Egypt.

*Author to whom correspondence should be addressed.


According to the new advances in the form of new firms, including JIT and Agile, further advances in technologies, computer programs, and the systems of official accounting all become necessary to be modified. Also, the considerations of kaizen costing systems, in addition to the new movements towards the concern of the customer, should come first as a result of the new movements towards the customer profit analysis. In a JIT supply chain, suppliers are responsible for informing their cus-tomers of their products. Within the context of the current research, it was suggested to use the sys-tems of Back-flush costing as well as throughput accounting systems to simplify the application of just-in time systems and agile systems to satisfy the requirements of achieving the policy of continu-ous improvement. Furthermore, the continuous debate between the different parties of the game supposed here will be realized and considered. The integration of competitors into various aspects of the supply chain has been made possible by the emergence of intelligent supply chains. Additionally, the rapid advancements in the industrial and technological landscape have placed a significant bur-den on the movement of goods and information, requiring efficient and cost-effective solutions to meet time-sensitive requirements and customer demands. It is even more promising to consider the potential for surpassing competitors in terms of achievements and capabilities. The continuous advancements in artificial intelligence have further emphasized the need for progress in both production quality and cost optimization. The rapid progress in both the just-in-time/agile and resilient systems has led to additional requirements for the implemented accounting system and the selected level of automated accounting system. Extensive analysis of various arguments within the scope of the present study has been conducted, promoting the adoption of a more reality-sensitive model for the application.

Keywords: Back-flush costing, throughput accounting, continuous improvement, JIT, agile system, intel-ligence supply chain, immediate production

How to Cite

El-Gibaly , M. M. (2024). A Proposed Costing System for Agile Just-In-Time Supply Chains with Back-Flush and throughput Accounting. Asian Journal of Economics, Business and Accounting, 24(5), 126–145. https://doi.org/10.9734/ajeba/2024/v24i51298


Download data is not yet available.


Towers NS. Production activity control systems within small and medium sized enterprises supporting supply chain requirements. The University of Manchester (United Kingdom); 2004.

Dyckman TR, Bierman H, Morse DC. Cost Accounting, Second Edition, South-Western Publishing Co., Ohio, USA; 1994.

Roša A, Lace N. The open innovation model of coaching interaction in organisations for sustainable performance within the life cycle. Sustainability. 2018;10(10):3516.

Nigri G, Del Baldo M. Sustainability reporting and performance measurement systems: How do small-and medium-sized benefit corporations manage integration? Sustainability. 2018;10(12):4499

Mackelprang AW, Nair A. Relationship between just-in-time manufacturing practices and performance: A meta-analytic investigation. Journal of Operations Management. 2010;28(4):283-302.

Nestra D, Srikanth ML, Kane M. Measuring operational performance in a gughput world. Management Accounting. 1996;41-47.

Lee HL, So KC, Tang CS. The value of information sharing in a two-level supply chain. Management Science. 2000;46(5): 626-643.

Masudin I, Kamara MS. Impact of just-in-time, total quality management and supply chain management on organizational performance: A review perspective. Jurnal Teknik Industri. 2018;19(1):11-20.

Olivera, Handfield R. Supply Market Intelligence: A Handbook for Managers, Auerback Publications. New York, NY; 2019.

Kinlaw DC. Continuous Improvement and Measurement for Total Quality: A Team-based Approach. Homewood, Illinois; 1992.

Chhikara N, Gahlyan A. Kaizen implementation for improving productivity and quality in manufacturing industry: A case study. International Journal of R and D in Engineering, Science and Management. 2017;6(3):1-14.

Jarial SK. Performance improvements of sheet metal industry using kaizen a case study. International Journal of Current Engineering and Technology. 2012;2(1):227-230.

Vento MO, Alcaraz JLG, Macías AAM, Loya VM. The impact of managerial commitment and Kaizen benefits on companies. Journal of Manufacturing Technology Management. 2016;27(5):692-712.

Medne A, Lapina I. Sustainability and continuous improvement of organization: Review of process-oriented performance indicators. Journal of Open Innovation: Technology, Market, and Complexity. 2019;5(3):49.

Mbaya MMN. The constraints and limitations of manufacturing resource planning (MRP II) as a tool for shop floor control (Doctoral dissertation, Massachusetts Institute of Technology); 2000.

Dhavale DG. Product costing in flexible manufacturing systems. Journal of Management Accounting Research. 1989;1: 66-89.

Narasimhan R, Swink M, Kim SW. Disentangling leanness and agility: An empirical investigation. Journal of Operations Management. 2006;24(5): 440-457.

Hariyani D, Mishra S. Barriers to the adoption of integrated sustainable-green-lean-six sigma-agile manufacturing system (ISGLSAMS): A literature review. Benchmarking: An International Journal. 2022;30(9):3590-3636.

Sharma V, Raut RD, Mangla SK, Narkhede BE, Luthra S, Gokhale R. A systematic literature review to integrate lean, agile, resilient, green and sustainable paradigms in the supply chain management. Business Strategy and the Environment. 2021;30(2): 1191-1212.

Lyu Z, Lin P, Guo D, Huang GQ. Towards zero-warehousing smart manufacturing from zero-inventory just-in-time production. Robotics and Computer-Integrated Manufacturing. 2020;64:101932.

Zhai Y, Zhong RY, Huang GQ. Buffer space hedging and coordination in prefabricated construction supply chain management. International Journal of Production Economics. 2018;200:192-206.

Zhai Y, Zhong RY, Li Z, Huang G. Production lead-time hedging and coordination in prefabricated construction supply chain management. International Journal of Production Research. 2017; 55(14):3984-4002.

Sutherland J, Canwell D. The Key Concepts. Key Concepts in Operations Management. 2004;1-264.

Ostrenga MR, Ozan TR, Mellhatton RD, Harwood M. Total Cost Management, John Wiley and Sons; 1992.

Kaplan RS, Norton DP. The balanced scorecard: Measures that drive performance. US: Harvard Business Review. 1992;70:71-79.

Orazalin N. Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy. Business Strategy and the Environment. 2020;29(1):140-153.

Hansen A, Mouritsen, J. Management accounting and changing operations management. Issues in Management Accounting. 2007;3:3-25.

Gunasekaran A, Yusuf YY. Agile manufacturing: A taxonomy of strategic and technological imperatives. International Journal of Production Research. 2002;40(6):1357-1385.

Janjić V, Bogićević J, Krstić B. Kaizen as a global business philosophy for continuous improvement of business performance. Ekonomika. 2019;65(2):13-25.

Epureanu BI, Li X, Nassehi A, Koren Y. An agile production network enabled by reconfigurable manufacturing systems. CIRP Annals. 2021;70(1):403-406.

Thilak VMM, Devadasan SR, Sivaram NM. A literature review on the progression of agile manufacturing paradigm and its scope of application in pump industry. The Scientific World Journal. 2015;1:1-9.

Aigbedo H. Analysis of parts requirements variance for a JIT supply chain. International Journal of Production Research. 2004;42(2):417-430.

Guo R, Tang Q. An optimized supply chain planning model for manufacture company based on JIT. International Journal of Business and Management. 2008;3(11):129-133.

Aigbedo H. An assessment of the effect of mass customization on suppliers’ inventory levels in a JIT supply chain. European Journal of Operational Research. 2007;181(2):704-715.

Horngren CT, Foster G, Datar S. Cost Accounting: A Managerial Emphasis, Prentice Hall International, Eights Edition; 1996.

Cimorelli SC, Chandler G. Control of production and materials. Factory Operations: Planning and Instructional Methods. 2005;185.

Hansen DR, Mowen MM. Management Accounting, Fourth Edition, South-Western College Publishing, Ohio; 1997.

Mahajan VB, Jadhav JR, Kalamkar VR, Narkhede BE. Interpretive structural modelling for challenging issues in JIT supply chain: Product variety perspective. International Journal of Supply Chain Management. 2013;2(4):50-63.

Choi TY, Netland TH, Sanders N, Sodhi MS, Wagner SM. Just‐in‐time for supply chains in turbulent times. Production and Operations Management. 2023;32(7): 2331-2340.

Manoj UV, Gupta JN, Gupta SK, Sriskandarajah C. Supply chain scheduling: Just-in-time environment. Annals of Operations Research. 2008; 161:53-86.

Inman RA, Sale RS, Green Jr KW, Whitten D. Agile manufacturing: Relation to JIT, operational performance and firm performance. Journal of Operations Management. 2011;29(4):343-355.

Elgibaly MM. Studying costs of activities during the product life cycle, to achieve the objectives of costs strategic planning and the continuous improvement of technologically advanced systems. Journal of Financial and Commercial Studies, Cairo University, Faculty of Commerce; 1997.

Cooper R. When do I need an activity-based cost system? Journal of Cost Management. 1996;41-48.

Wang S, Sarker BR. Optimal models for a multi-stage supply chain system controlled by kanban under just-in-time philosophy. European Journal of Operational Research. 2006;72(1):179-200.

Hicks DT. Activity-based costing for small and mid-sized businesses: An implementation guide, John Wiley and Sons Inc; 1992.

Zhang DZ. Towards theory building in agile manufacturing strategies—Case studies of an agility taxonomy. International Journal of Production Economics. 2011;131(1): 303-312.

Staubus GJ. Activity costing: Twenty years on. Management Accounting Research. 1990;1(4):249-264.

Barkhordari R, Denavi HD. Just-In-Time (JIT) manufacturing and its effect on the competence of supply chain and organizational performance in the Tile and Ceramic industry in Yazd province. Specialty Journal of Knowledge Management. 2017;2(1-2017):8-19.

Biswas P, Sarker BR. Operational planning of supply chains in a production and distribution center with just-in-time delivery. Journal of Industrial Engineering and Management (JIEM). 2020;13(2):332-351.

Bond PL, Green Jr KW, Inman RA. Relationships among JIT practices: An interpretive modeling approach. Production Planning and Control. 2020;31(5):400-411.

Vokurka RJ, Lummus RR. The role of just‐in‐time in supply chain management. The International Journal of Logistics Management. 2000;11(1):89-98.

Calvasina RV, Calvasina EJ, Calvasina GE. Beware the new accounting myths. Strategic Finance. 1989;71(6):41-45.

Vesna-Janji, Jasmina Bogićevi, Bojan Krsti. Kaizen as a global business philosophy for continuous improvement of business performance. Ekonomika. 2019;65(2):13-25.

Zimmer K. Supply chain coordination with uncertain just-in-time delivery. International Journal of Production Economics. 2002;77(1):1-15.

Dubey R, Gunasekaran A. Agile manufacturing: Framework and its empirical validation. The International Journal of Advanced Manufacturing Technology. 2015;76:2147-2157.

Xu X, Han M, Nagarajan SM, Anandhan P. Industrial Internet of Things for smart manufacturing applications using hierarchical trustful resource assignment. Computer Communications. 2020;160:423-430.

Yang J, Xie H, Yu G, Liu M. Achieving a just–in–time supply chain: The role of supply chain intelligence. International Journal of Production Economics. 2021;231:107878.

Baiman S, Demski JS. Economically optimal performance evaluation and control systems. Journal of Accounting Research. 1980;184-220.

Ogungbade OI, Idode PE, Alade ME. An empirical investigation of the adoption status of the new management accounting techniques among Kenyan manufacturing companies. European Journal of Business, Economics and Accountancy. 2021;4:68-78.

Amahalu N, Nweze C, Chinyere O. Effect of backflush accounting on financial performance of quoted food and beverage firms in Nigeria. EPH-International Journal of Medical and Health Science. 2017;2(3):58-80.

Malakouti M, Rezaei S, Shahijan MK. Agile supply chain management (ASCM): A management decision-making approach. Asia Pacific Journal of Marketing and Logistics. 2017;29(1):171-182.

Demartini M, Pinna C, Aliakbarian B, Tonelli F, Terzi S. Soft drink supply chain sustainability: A case based approach to identify and explain best practices and key performance indicators. Sustainability. 2018;10(10):3540.

Mistry JJ. Supply chain management: A case study of an integrated lean and agile model. Qualitative Research in Accounting and Management. 2005;2(2):193-215.

Paulinus EC, Amaechi EB, Okegbe TO. Effect of Back-Flush accounting techniques on the financial performance of quoted manufacturing firms in Nigeria. Journal of Accounting and Financial Management. 2019;5(2):73-86.

Tabitha N, Ogungbade OI. Cost accounting techniques adopted by manufacturing and service industry within the last decade. International Journal of Advances in Management and Economics. 2016;5(1):48-61.

Varsei M, Soosay C, Fahimnia B, Sarkis J. Framing sustainability performance of supply chains with multidimensional indicators. Supply Chain Management: An International Journal. 2014;19(3):242-257.

Yun JJ, Yigitcanlar T. Open innovation in value chain for sustainability of firms. Sustainability. 2017;9(5):811.

Elgibaly MM. A modified model for the allocation of general industrial costs in the light of the agency alliances theory and moral hazards - A theoretical and practical study. IJISET. 2021;8(4):6-72.

Elgibaly MM. A proposed model for studying and determining the negotiated transfer pricing, with the existence of random bargaining behaviors of the internal performance agents. Journal of Business and Management. 2022;24(5):13-36.

Amir F. Significance of lean, agile and leagile decoupling point in supply chain management. Journal of Economics and Behavioral Studies. 2011;3(5):287-295.

Takahashi K, Nakamura N. Agile control in JIT ordering systems. International Journal of Agile Management Systems. 2000;2(3):242-252.

Potdar PK, Routroy S, Behera A. Agile manufacturing: A systematic review of literature and implications for future research. Benchmarking: An International Journal. 2017;24(7):2022-2048.

Maletič M, Maletič D, Dahlgaard JJ, Dahlgaard-Park SM, Gomišček B. Effect of sustainability-oriented innovation practices on the overall organisational performance: An empirical examination. Total Quality Management and Business Excellence. 2016;27(9-10):1171-1190.

Qamar A, Hall MA, Collinson S. Lean versus agile production: Flexibility trade-offs within the automotive supply chain. International Journal of Production Research. 2018;56(11):3974-3993.

Sundar R, Balaji AN, Kumar RS. A review on lean manufacturing implementation techniques. Procedia Engineering. 2014;97:1875-1885.

Carvajal-Arango D, Bahamón-Jaramillo S, Aristizábal-Monsalve P, Vásquez-Hernández A, Botero LFB. Relationships between lean and sustainable construction: Positive impacts of lean practices over sustainability during construction phase. Journal of Cleaner Production. 2019;234:1322-1337.

García JL, Rivera DG, Iniesta AA. Critical success factors for Kaizen implementation in manufacturing industries in Mexico. The International Journal of Advanced Manufacturing Technology. 2013;68:537-545.

Gligor DM, Esmark CL, Holcomb MC. Performance outcomes of supply chain agility: when should you be agile? Journal of Operations Management. 2015;33:71-82.

Zhang M, Qi Y, Wang Z, Pawar KS, Zhao X. How does intellectual capital affect product innovation performance? Evidence from China and India. International Journal of Operations and Production Management. 2018;38(3):895-914.